SEPARATE STATEMENT OF CHAIRMAN MICHAEL K. POWELL
Re: Report and Order in CC Docket Nos. 00-199, 97-212 and 80-286; Further Notice
of Proposed Rulemaking in CC Docket Nos. 00-199, 99-301 and 80-286
In this Order, we conclude the second phase of the comprehensive review of our
accounting rules and the Automated Reporting Management Information System
(ARMIS). This review began two years ago, under the able leadership of the previous
Chairman, and has progressed to this stage through the tireless efforts of my colleagues,
our staff, state commissions, various aspects of the industry and other interested parties.
This Order is the culmination of all these efforts.
As one who feels strongly that we must take seriously our duty, under the 1996
Act, to prune unnecessary regulation, I find much to support in this Order. First, we
substantially consolidate and streamline Class A accounting requirements. Second, we
relax certain aspects of our affiliate transaction rules. Third, we significantly reduce the
cost of regulatory compliance with our cost allocation rules for mid-sized carriers.
Finally, we reduce the ARMIS reporting requirements for both large and mid-sized
LECs.
But given the current heavy public reliance on aspects of the requirements we
have attempted to reform during this longstanding proceeding, I also support the manner
in which we have chosen to move forward in this second phase. Specifically, in adopting
these rule changes, we have attempted to steer a course that avoids both deregulation
simply for its own sake and the countervailing temptation to retain legacy rules in their
current form. Just as importantly, we have repeatedly engaged interested parties to
ensure that we have fully considered their views and arguments in reaching the decisions
reflected here, even when we ultimately do not find those arguments persuasive.
I would note, in particular, that I, my fellow federal commissioners and our staff
have expended a great deal of time wrestling with the many positions advocated by our
state commission colleagues. Indeed, the Commission is adopting this Order several
weeks after we had originally planned to do so primarily because we wanted to satisfy
ourselves that we had heard, one last time, some of the states' arguments. Certainly,
some of these conversations retraced old ground or underscored philosophical differences
that will take additional time to explore. In some cases, however, these conversations
persuaded us that it would be more prudent to preserve existing requirements or even add
new ones, at least until we progress to the next phase of comprehensive accounting and
reporting reform. Although I generally do not find it beneficial for the Commission to
delay action in proceedings that have gone on this long, the brief delay under the specific
circumstances here has yielded some marginal benefits.
As we move forward into the final stage of this comprehensive review of the
Commission's accounting and reporting requirements, I look forward to hearing from
state commissions and other interested parties earlier in the process leading to the next
Order in this proceeding. Accordingly, I strongly encourage all concerned to review the
companion Further Notice and any of our previous notices carefully and then file
comments, so that a useful record can be developed. The Commission has long since,
pursuant to the mandates of the 1996 Act, committed to following a path toward greater
and greater deregulation in this area and interested parties should not lightly decline to
influence that path.
As has been the case throughout this proceeding, it will be difficult for the
Commission to resolve the highly-complex and contentious issues that will no doubt
arise. For example, some state commissions have emphasized that historically they have
used the information made available under our rules to replace or supplement that which
is or, in principle, could be made available by other means. Yet I have serious concerns
about whether federal accounting and reporting requirements should be retained to the
extent they serve solely state purposes. The Commission will need to work closely with
all participants in the proceeding so that it can determine which arguments have the most
merit, which can form the basis for a rough consensus and which will remain
irreconcilable terms of an agreement to disagree. I look forward, in particular, to
working with my state colleagues on further reform in this area.